The IDC is taking a R2bn bet on Pat Nodada of Busmark.
This article first appeared in Moneyweb.
The man being called the Bus King of Africa is a 42-year-old chartered accountant.
Having conquered the South African bus market, Busmark CEO Pat Nodada is now partnering with the Industrial Development Corporation (IDC) to build bus factories across Africa, starting with Zimbabwe, Kenya, Nigeria and Ghana.
It’s a bold move that will increase Busmark’s monthly output from 100 to 500 buses over the next five years. The IDC is taking a R2 billion bet that Nodada can pull this off by replicating the same formula that turned Busmark into the dominant bus maker in SA, with an estimated 40% of the local and 20% of the Zimbabwean market.
Nodada bought into the company a decade ago, retooled its Randfontein factory to supply city transporters such as Metrobus and MyCiti and promptly won a contract to supply the Gautrain fleet. That fleet is now being retired and replaced with a new one – again supplied by Busmark.
Busmark is a second-tier original equipment manufacturer (OEM) supplying buses to first tier OEMs such as Mercedes, Volvo, Scania and Real African Works. The engines and powertrains are imported, but everything else is made locally.
The Randfontein factory turns out 100 units a month, with the capacity to produce double this, and recently added battery-powered and hydrogen fuel cell buses to its production capability. This, says Nodada, is where the future lies.
“One of the big challenges we had to overcome was to reduce the weight of the batteries so that we could carry more passengers, and we managed to do this by making design improvements with the help of the CSIR and several local universities.”
The battery-powered bus – which is now in development and will be in action around Joburg as part of the Gautrain fleet pilot – can achieve a range of 150km before recharging. The hydrogen-powered bus is likewise attracting interest from city transport fleets under pressure to reduce their carbon footprints. Though the buses cost more than diesel ones, they are far cheaper to maintain (with just five moving parts as opposed to nearly 2 000 for diesel engines).
Output up threefold in 10 years
Busmark’s output has shot up threefold since Nodada bought the company a decade ago, the result of a decision to diversify away from commuter to luxury city buses.
You won’t hear much about Busmark because its buses carry the OEM branding like Mercedes, Man and Volvo, but the buses boast a local content of 90% with the engines and powertrains coming from abroad. The company is 75% owned by the Nodada family, putting it beyond the prying eyes of the public, with the rest held by staff and management.
This month 30 buses left the Randfontein factory destined for Kenya, part of an order for 90 units. The buses are designed in SA to withstand the most tortured roads, with rubber undercarriages and reinforced suspension.
This is a prelude to the opening of a new bus assembly plant in Nairobi later this year in a joint venture with Mercedes Toyota Tsuscho that will turn out 20 units a month. A similar-sized factory will open up in Harare in July this year. A much larger factory with the capacity to churn out 250 units a month will open in Nigeria next year, followed by a fourth factory in Ghana by 2022. Smart factories are also in the works for Port Elizabeth and Durban.
Robotics and AI
Even more impressive is the plan to consolidate the scattered Randfontein plants into a single ‘smart’ factory within the next year, where robotics and artificial intelligence will churn out a new generation of SA-made buses conforming to the highest standards in the world.
Busmark is already compliant with SA, ISO and European quality standards, but Nodada is particularly proud of the fact that the company is regarded as a world leader in battery and hydrogen fuel-cell powered buses, but with a twist – these buses are built for some of the most testing roads in the world.
“We guarantee a 15-year life for any bus that comes out of our factories, regardless of where the buses are required to operate,” says Nodada.
“And we offer 24-hour support, which can be a challenge when you have a breakdown in rural Zimbabwe – but we can do it. We have had to modify our buses to withstand some of the worst roads in the world.”
What’s next once Busmark has taken the East and West African markets?
“That’s a discussion for another day,” says Nodada. “For now, our hands are pretty full with six new factories to open in the next three years. We are investing in the very latest technologies and our new factories will reflect this.
“The bus market in Africa is huge, and the push from bus operators is for more durable buses with lower operating costs. That is where we are focusing our energies: making it more profitable for bus operators across the continent. And we know how to do this.”